The government on Monday clarified that the recent announcement regarding foreign investment norms for companies will not apply to banking and defence sectors.

Commerce minister Nirmala Sitharaman with former Ficci president Sidharth Birla in New Delhi on Monday. (PTI Photo)

The government on Monday clarified that the recent announcement regarding foreign investment norms for companies will not apply to banking and defence sectors.

Portfolio investment limits in both the sensitive sectors will be retained at existing levels to prevent ‘fly-by-night operators or quick money coming in and going out,” commerce minister Nirmala Sitharaman said.

In banking, portfolio investments will be limited to the current 49%. However, FDI can be raised to 74%. In defence, the portfolio investment cap will be 24%, although the FDI limit can go up to 100% on a case-to-case basis.

Portfolio investments include FIIs, FPIs, and QFIs, which are volatile in nature.

“In defence as regards the cap which prevailed for foreign portfolio investment (FPI), and in banking, particularly private banking, on foreign institutional investment (FII) we don’t want fly-by-night operators or quick money coming and going out. Those two specific sub-caps would prevail,” Sitharaman said on the sidelines of an event organised by the commerce ministry, the World Intellectual Property Organisation and industry chamber Ficci.

The government last Thursday introduced a composite cap on all sorts of foreign investments (FDI, FII and NRI etc) to boost overseas inflows and improve the ease of doing business in the country.

Sitharaman also said that the government’s initiatives, including recruiting more number of examiners to address the backlog of pending patent applications, and making most of the application process online, will soon start yielding results once the new intellectual property rights (IPR) policy is implemented. “We are very keen to make Indian patent rights, geographical indications (GI) and copy rights well protected.”

Around 459 examiners have being already recruited to fast track the process of patent, she added.

“The draft policy, which came to us a little over a month ago, has gone to all ministries for inter-ministerial consultations, post which it will be finalised for the Cabinet,” she added. “Here is no need for apprehension in any corner of the world as to India’s patent regime. We are TRIPS compliant, and confident and sure that we shall protect (the IPRs).”

The National IPR Policy has been formulated in a move to foster innovation, accelerate economic growth, employment and entrepreneurship, besides protecting public health, food security and environment, among other areas of socio-economic importance.

Developed countries, including the US have raised concerns over India’s IPR laws, particularly those related for solar and pharmaceutical sectors.

Sitharaman said that the ministry is also engaged in several things in order to reduce pendency of applications and improve functioning of patent offices.